Supply Chain with Free-Riding Consideration under BOPS: Pricing/Subsidy Decision Research

This study considers the common free-riding phenomenon in traditional dual-channel supply chains and constructs profit models for both the traditional dual-channel model and the BOPS (Buy Online and Pick up in Store) omnichannel model under these conditions. The aim is to explore the impact of consumer channel preferences, consumer sensitivity to service, and other factors on business profits and decisions. Through numerical simulations comparing the profit performance of the two models, it reveals the advantages of introducing the BOPS model in different market scenarios. The study found that implementing the BOPS model is not profitable when the proportion of offline consumers is either high or low. However, when there is no significant difference in the attractiveness of the product between online and offline channels, implementing the BOPS model becomes more advantageous. In today's modern supply chain models, where different channels are increasingly interdependent, the study also found that a moderate level of free-riding in the BOPS model can increase the overall profitability of the entire supply chain.